Petrol price hiked by Rs 2 per litre due to weak rupee

Petrol price was hiked by a steep Rs 2 a litre on Saturday, the second increase in rates this month, as devaluation of rupee against US dollar made imports costlier.

The hike, which is effective from Saturday midnight, is excluding local sales tax or VAT and actual increase for consumers will be higher.

Petrol price in Delhi was hiked by Rs 2.40 a litre to Rs 66.39 from Rs 63.99 previously.

This is the second increase in rates this month. Oil firms had from June 1 hiked prices by 75 paisa, excluding VAT.

However unlike last time, there will be no change in price of diesel.

“Since last price change, the slide in Rupee (against the US dollar) has continued and the USD-INR Exchange rate has deteriorated from Rs 55.32 to Rs 57.08 per USD,” said Indian Oil Corporation, the nation’s largest oil firm.

IOC said international petrol prices have also hardened during this period. “The combined impact of both these factors, mainly depreciation of the rupee, has warranted the increase in petrol prices by Rs 2 per litre (excluding VAT),” it said in a statement.

The June 1 increase in petrol price was the first in three months. The previous hike was on March 1, which was followed by rates being cut four times on falling global oil prices.

Diesel prices has been hiked on five occasions since January when the government authorised state-owned oil firms to increase prices by up to 50 paisa per litre every month till entire losses on the fuel are wiped out.

Since diesel price was hiked by 50 paisa, excluding VAT, on June 1, the next increase will happen at the month end.

IOC said the devaluation of rupee has led to widening of losses on diesel and cooking fuel.

Losses on diesel have widened to Rs 6.31 a litre from Rs 4.87 at the beginning of the month. Besides, oil firms are also losing Rs 27.75 per litre on kerosene and Rs 335.14 on sale of every 14.2-kg domestic cooking gas (LPG) cylinder.

The company said at current rate IOC would end the fiscal with a total revenue loss of about Rs 60,000 crore while the industry (IOC plus other state-owned fuel marketing firms) would incur around Rs 1,12,500 crore loss.

“The movement in international oil markets and INR-USD exchange rate has been put on a close watch and developing trends will be reflected in future price changes,” it added.

Following are the revised prices of petrol in four metros after oil firms hiked rates with effective from Saturday midnight.

I fail to understand 1) why is it that the taxation on petroleum so high
(a) Import duty
(b) Central tax
(c) state tax that too the sales tax is higher than sales tax on
other essential commodities!!

2) On top of it why is it that the sales tax on an essential commodity like this is not a fixed amount, why is it a fixed percentage? This way every time international prices rise and fuel prices rise government get more money as tax(gov. might
be wanting always for a price rise so that it can earn more in tax).

At the end of the day there is no substitute for petroleum and yet the its common man who is always paying exorbitant amount!!!

Wake up public question government and ask for transparency!!

from:
Rohit khanna

Posted on: Jun 16, 2013 at 00:24 IST

Diesel price was not increased, though it was on the news due to political cause as most of the politicians own diesel vehicles.

from:
K Kannan

Posted on: Jun 15, 2013 at 22:16 IST

I believe the Rupee is not weak but the Finance Ministry is weak and does not take any measure to appreciate the rupee against dollar. Petrol prices are hiked when rupee is weak and when the international prices shoot up. however, the agenda is clear to hike the price. reduce 2 rupee in three fold and rise it in one fold, what is the use of this system. Let them totally liberalize petrol and daily price variation can be introduced,but the oil companies should give quality product, like shell companies outlets.